Cell lines made from papillomas resulting from treatment of SENCAR mice with 12-0-tetradecanoylphorbol-13-acetate (TPA) alone, without exogenous chemical initiation were found to express high levels of message for keratin 13, a keratin not normally expressed in the epidermis. The original tumors and cell lines were previously found not to have the additional XbaI restriction site in the ras(Ha) gene diagnostic for an A to T point mutation in the second base of codon 61, which leads to activation of the oncogene. We have now shown by direct sequencing of polymerase chain reaction products from DNA of the cell lines that there is an activating A to G mutation at the same position. Studies with the cell line SCR722, a presumed initiated cell line derived from adult SENCAR epidermal cells initiated in culture with N-methyl-N'-nitro-N-nitrosoguanidine, show that its parent produces carcinomas in skin grafts, while SCR722 produces normal skin. This suggests that SCR722 may be a model both for oncogene activation and tumor suppression. Staurosporine, widely used as an inhibitor of protein kinase C, at nmole levels appears to activate protein kinase C and induce terminal differentiation in SENCAR papilloma cell line SP-1. In vivo, treatment of grafted SP-1 cells with a single low dose of staurosporine can strongly or completely inhibit tumor formation.